Wednesday, April 29, 2009

Tips for Hiring a Property Agent

When purchasing rental property as an investment it is important to consider hiring a rental property agent. Many people hesitate to hire a property agent because of the cost associated with it; however, a good rental property agent can help you to reduce a lot of the day to day work you must handle regarding your property. The key to making this type of arrangement work for you; however, is in knowing how to find a good agent and what to look for.

One of the main tasks which an agent handles is finding tenants for your property. They also provide the rental agreement. In most cases, rental agents do not provide a service which would keep your property in good condition. In most cases, agents only respond in the event there is a complaint from the tenant. If an agent is less than responsible; you may find yourself owed rent and your property in shambles. Therefore, if you decide to use an agent you need to make sure that your agent covers several critical areas.

First, they should always provide you with an assessment of the reliability of the tenant. Not only should the agent check the references of prospective tenants but they should also utilize other methods so they can be assured the tenant will care for your property and pay their rent on time. Before hiring an agent question them regarding the methods they use for this purpose.

You should also make sure that the agent will be able to handle the collection of rent effectively. Speak with them regarding the methods they use for collecting back rent when a tenant fails to pay their rent on time. In addition, find out how the agent addresses the issue of bounced checks.

In addition, you should speak with prospective agents regarding how often they will inspect the property and what they will look for when they perform those inspections. Furthermore, find out how they will record information and provide feedback to the tenant as well as to you. This information can be vital to ensuring a well operated rental property.

You should also find out how payments will be passed on to you and how frequently you will receive rental payments. Not all agents have the same policy. Some agents will actually retain payments for a month so they can earn the interest on the money before they pass the payments onto the landlord.

Of course, you should also find out how much the agent charges for the services they provide. Shop around to find out whether this fee is on-target for the service which the agent provides. If the agent is providing a good, reliable service it can be a benefit to your and your investment property and as a result it can be a good investment.

Be sure you ask to review any forms the agent uses, especially the rental agreement. You should always know the terms under which your rental property will be rented.

Keep in mind that on-site managers usually charge more; however, that cost can often be offset by the fact that you may be able to decrease maintenance costs by ensuring you have a well-run property.

Remember that having a good property management agent can essentially bring you more of a profit. Perhaps one of the biggest costs you will face when operating a rental property is the cost associated with changing tenants. When you figure in vacancy rates, the cost is even higher. Therefore, it is obviously in your best financial interest to keep good tenants. A competent property management agent can help to make this a reality.

Choosing your agent carefully and ensuring that you understand exactly what the agent provides and what they do not provide in terms of services can help to ensure that your investment is successful and not a headache.

Tips for Handling Vacancies in your Rental Property

From time to time you will have vacancies in your investment rental property. When that occurs, you will naturally want to rent the property as quickly as possible so that you do not lose out on any rent money. It could even be that when you purchase the property, it could be vacant. There could be many reasons why it could potentially take some time to find tenants. Perhaps the location is affecting it. Or, it could be that there are simply a number of properties for rent in the local area. Regardless of why your property is vacant you will need to get it rented as quickly as possible.

For every month that your property is vacant, you are losing money in revenue. There are some things you can do to reduce the amount of time that your property is vacant; however.

First, when your property is vacant, use that time to your advantage by making any repairs that are necessary and handling any maintenance tasks. In addition, you might also consider doing something to make the property more appealing such as touching up the paint or sprucing up the yard.

You might also consider providing some type of incentive or discount in order to get your property rented more quickly. Certainly this will cost a bit of money but in the long run it is often less expensive to provide an incentive in order to get your property rented more quickly than to allow it to sit vacant for a period of time. You might think about reducing the rent or installing something in the apartment that would be appealing to prospective tenants such as a washer and dryer.

Make sure you making strong efforts to market your rental property but running ads in all of the local papers and hanging up flyers at places of interest. Of course, you should also have a For Rent sign posted on the property so that everyone who drives by will see it and know the property is available for rent or lease. Once again, a small amount of money spent on marketing is less expensive than the amount of lost revenue you could incur by allowing the property to sit vacant.

In addition, take be proactive and begin the search for tenants before your current tenant moves out if you have reason to believe that they will be leaving soon. It is never a good idea to wait until the last minute and then try to fill a vacancy. You might even ask the current tenants if they know of anyone who might be interested in renting the property. It could be quite possible that they have friends who have visited and would jump at the chance to rent the property once it is available.

Keep in mind; however, that as important as it is to rent your property quickly and avoid a vacancy you also do not want to rent out the property so quickly that you fail to conduct a thorough screening. The first time you receive an inquiry on the property, you need to begin the screening process. Take the time to obtain some basic preliminary information about applicants while also providing information about your rental property.

Of course, you must abide by fair housing laws and you also must make sure you are fair in asking the same questions of all applicants so it is a good idea to write down your pre-qualifying questions so you can be sure that you are being fair. If you are unsure of what you are allowed and not allowed to ask by law, consider consulting an attorney.

Before you end the phone call with the applicant, encourage them to drive by the property so they can see it in person and then call to make an appointment with you to see the interior.

Tips for Coping with Loud Tenants

One of the most common issues that many landlords must deal with when they have investment rental property is music. It is not uncommon for many renters to either play music quite loud or play an instrument. This can be disturbing to neighbors and as a result you may receive phone calls of complaint. How you handle these issues is quite important because it involves a fine balance of maintaining happy renters and yet ensuring that neighbors surrounding your property are not disturbed.

In the event that you own a multi-dwelling property this can be even more of an important issue as other tenants in the building may not appreciate being disturbed by loud music. If you fail to handle the issue properly they may decide to rent elsewhere; leaving you with vacancies and that can be expensive. Furthermore, your property may gain a bad reputation, making it difficult to rent to future tenants as well.

When you are facing this type or problem there are actually several different ways that you can handle the issue. First, it is imperative that you make sure you have discussed your property rules with tenants before they actually move in. This type of action can help to prevent problems before they even begin.

Ensure that you have included terms within your lease stating when exactly music may be played. You should also include in your lease statements indicating specific times when music may not be played so loudly that it can be heard outside the individual unit. For example, you might state that music may not be played before 8am and after 10pm. You should also make sure that these terms include not only music but also actual musical instruments as well as televisions.

In addition, make sure you check on your property periodically to ensure that your tenants are not playing loud music at night or early in the morning. If you find that they are breaking this rule, do not hesitate to let them know that they are violating the terms of their lease. If you allow the issue to continue unchecked you are sending the message that this behavior is acceptable to you and later on it could be quite difficult to stop when the complaints begin rolling in.

Sometimes, checking on a property early in the morning or late at night is not feasible; especially if you live a good distance away. In this case, consider asking your neighbors to advise you if your tenants disturb them with loud music or noise. Remember that it is always best for neighbors in the area to advise you about the problem so that you will have an opportunity to correct it before they contact the city or the police with their complaints. This will also assure neighbors that you are concerned about the neighborhood and maintaining a peaceful atmosphere for everyone.

Once you have contacted your tenant verbally regarding the matter, make sure you follow-up with a reminder in writing. This should help your tenant(s) to understand the severity of the situation and will also provide you with the documentation you need in the event the behavior continues and you must consider evicting them because of it.

Ideally, the best way to handle this type of situation is to prevent it before it ever begins. Explain to your tenants when they move in that you regard the issue as serious and that you will check up on the property from time to time. If you decide to rent to students, this is especially important. By making sure that you have established a cordial relationship with your tenants early on they will be far more likely to respect your rules and understand where the line is drawn so they will not cross it.

Properly managing a rental property means not only providing a pleasant living environment for your tenants but also ensuring that your rental property does not disturb others in the neighborhood.

Tips for Avoiding Discrimination and Ensuring Fair Housing

Avoiding discrimination is imperative when you own investment rental property. The Fair Housing Act regulates this and you could find yourself in legal trouble if you do not adhere to these regulations.

First, you must make sure that the property is available to be shown to all individuals who are interested in renting it. Generally, interested parties will call to inquire about the property before they actually see it. When you answer questions about the property you must make sure that you are providing the same information to everyone who calls. If you venture into offering different conditions, terms and/or information to different individuals who call to inquire about the property, you could be liable for discrimination. Basically, you need to make sure that you are covering all of the specifics of the property without necessarily trying to deter applicants away from the property based on any of the areas which are protected under the Fair Housing Act. Areas which need to be covered when applicants call include amenities of the property, property size, location, etc.

In addition, you need to make sure that your rental application is also designed with fair housing standards in mind. The best way to do this is to have an attorney review your rental application and then provide the same documents to all prospective renters. Also, make sure that the process is the same for everyone. Ultimately, when you deny or accept a rental application your decision should be based on valid requirements and not personal opinions.

Beyond the application, you will also need to give some thought to occupancy restrictions for your property. It is not uncommon for many people to restrict the number of people who are allowed to live in their rental unit. There can be many different justifications for occupancy restrictions and standards. When establishing occupancy restrictions and standards; however, you need to be certain that your standards are fair and do not effectively discriminate against families with children. This is one of the more common complaints filed as many prospective tenants feel as though an overly restrictive standard regarding maximum occupancy discriminates against them and their children.

Different laws regarding occupancy standards and restricts apply in different states. The key in most states is to ensure that you are using good reason and common sense. For example, if you have a 1,000 square foot two bedroom home, then it would obviously be excessive to have seven people in the home.

There are no prohibitions regarding restrictions on the number of people who are allowed to occupy a residence under the Federal Fair Housing Act. It is critical; however, that any restrictions which are adopted be reasonable and apply to all occupants. You must discriminate on the basis of race, color, national origin, family status, gender, religion or handicap.

The most common standard adopted by most property managers is two people per bedroom. This standard is considered to be fair and reasonable by most. If; however, the residence in question is particularly large or it could easily accommodate more persons, it is important to keep in mind that such a policy could be challenged and a complaint filed so it is imperative to be sure that standards are flexible when the need calls for it based on available space within the dwelling.

Tips for Avoiding Discrimination and Ensuring Fair Housing

Avoiding discrimination is imperative when you own investment rental property. The Fair Housing Act regulates this and you could find yourself in legal trouble if you do not adhere to these regulations.

First, you must make sure that the property is available to be shown to all individuals who are interested in renting it. Generally, interested parties will call to inquire about the property before they actually see it. When you answer questions about the property you must make sure that you are providing the same information to everyone who calls. If you venture into offering different conditions, terms and/or information to different individuals who call to inquire about the property, you could be liable for discrimination. Basically, you need to make sure that you are covering all of the specifics of the property without necessarily trying to deter applicants away from the property based on any of the areas which are protected under the Fair Housing Act. Areas which need to be covered when applicants call include amenities of the property, property size, location, etc.

In addition, you need to make sure that your rental application is also designed with fair housing standards in mind. The best way to do this is to have an attorney review your rental application and then provide the same documents to all prospective renters. Also, make sure that the process is the same for everyone. Ultimately, when you deny or accept a rental application your decision should be based on valid requirements and not personal opinions.

Beyond the application, you will also need to give some thought to occupancy restrictions for your property. It is not uncommon for many people to restrict the number of people who are allowed to live in their rental unit. There can be many different justifications for occupancy restrictions and standards. When establishing occupancy restrictions and standards; however, you need to be certain that your standards are fair and do not effectively discriminate against families with children. This is one of the more common complaints filed as many prospective tenants feel as though an overly restrictive standard regarding maximum occupancy discriminates against them and their children.

Different laws regarding occupancy standards and restricts apply in different states. The key in most states is to ensure that you are using good reason and common sense. For example, if you have a 1,000 square foot two bedroom home, then it would obviously be excessive to have seven people in the home.

There are no prohibitions regarding restrictions on the number of people who are allowed to occupy a residence under the Federal Fair Housing Act. It is critical; however, that any restrictions which are adopted be reasonable and apply to all occupants. You must discriminate on the basis of race, color, national origin, family status, gender, religion or handicap.

The most common standard adopted by most property managers is two people per bedroom. This standard is considered to be fair and reasonable by most. If; however, the residence in question is particularly large or it could easily accommodate more persons, it is important to keep in mind that such a policy could be challenged and a complaint filed so it is imperative to be sure that standards are flexible when the need calls for it based on available space within the dwelling.

Tips to Being a Successful Landlord

The ultimate goal of investing in rental property is turn a profit. To make sure that you achieve that goal it is essential that you follow several critical guidelines.

First, always make sure that you check references. This can be a burdensome step that many landlords overlook if they feel as though they have a good instinct about the tenant when they meet with them. Not checking references; however, can lead to a number of problems. You can uncover a wealth of information about potential problems before you rent to a prospective tenant.

Always make sure that you have everything in writing. This is to protect not only your rights but also the rights of your tenants as well. Everything from the code of conduct you expect tenants to abide by while renting your property to the rental application itself should be in writing.

You will find that you have better success with your rental property if you take the time to ensure that it is both secure and clean. The grounds of the property should be free of clear and trimmed regularly. Not only will the property be more visually appealing but these actions will also assist you with property liability. You will also want to take additional security measures. Extra security may be able to lower your insurance premiums as well as provide an incentive to quality tenants to rent your property when they know it is secure.

If you make the decision to hire a property manager, take the time to interview prospective candidates very carefully. Property managers can be quite helpful if you do not have the time to tend to all of the details yourself. The wrong property manager; however, can cause you tremendous problems. This means that you will need to hire a thoroughly responsible and professional individual to handle the job.

Always make sure that you obtain adequate insurance. Not only should you have property insurance but you should also have liability insurance. One incident is all it takes to wipe out your investment. Check with your state to determine if any additional insurance coverage is required.

Regardless of the condition the property was in when you purchased it, there will come a time when repairs are needed. This is part and parcel of owning rental property. If you take too long to make repairs, not only will your property suffer and repairs will ultimately cost more to take care of but you will also likely lose quality tenants as well. By making sure that you handle repairs promptly you will be able to maintain the life of your property as well as retain good tenants.

Always make sure that you follow all applicable regulations in the renting of your investment property. The Fair Housing Administration Act provides precise regulations in order to prevent discrimination. If you violate those regulations you could find yourself facing a lawsuit that is costly in terms of time as well as money. The best course of action is to take the time to do your homework and consult an attorney experienced in real estate matters for guidance regarding the FHA as well as ensuring that you have the proper forms.

Finally, make sure that you do not violate the privacy of your tenants. Check with your state’s regulations to find out whether you must provide any type of notice to your tenant before you enter the dwelling.

Following these guidelines will help you to retain quality tenants and avoid any potential legal problems.